Interview with Stephen Holliday, CEO at Level Financial Technology

Level is designed to make people’s wages go further. We are a financial health benefit that employers give their employees with an aim of making them better custodians of their money and their financial future.

We do that through a combination of educational tools designed to engender positive behavioural change and through salary-linked financial products with features that are far better than anything you could get on the open market. We really believe that this is a hidden power that most employers aren’t aware that they have.


How did you come up with the idea for the company?

My own background is in the banking industry as an investor in public markets but more recently in the fintech world. We increasingly started to see massive amounts of innovation going on in the direct-to-consumer market, particularly around what I would describe as the unbundling of Lloyds Bank. Things you could only do in Lloyds Bank 10 years ago all of a sudden were becoming possible to do in small pieces in many different ways.

Putting these pieces together with other services enables you to create genuinely better products. We wanted to take what we saw going on in that market and move it into the workplace, where we saw a really strong ethical use case for Open Banking in helping people to better manage their personal finances.

From my experience in the banking industry (and why it often gets a bad press), you have a lot of these 80/20 models where no one pays for a current account. So how do they make money out of it? They make money out of it by charging what are viewed as very high rates of interest for people that go into overdrafts. That has become their business model. I understand from the bank’s perspective why they do this, but also why, from a consumer perspective, it doesn’t feel fair. You end up with this concept of a poverty premium, where the least able people pay the most and subsidise others.

When you start a new business, you start from scratch and can design something that is better and fairer, rather than falling into traps. We are committed to delivering solutions that genuinely work better for everyone and use technology in a positive, ethical way. We want to see people taking control of their personal finances and making informed decisions.

I’d read a lot about similar services in America that were early stage. They were providing people with early wage access, which struck me as a brilliant product. Essentially, you swap your company’s credit risk for your own and you are able to access short term money, 95% cheaper than a pay day loan and in a much more ethical way.

With early wage access, you are only able to draw down money that you have already earned, just ahead of your usual pay day. We looked at it more and established that it would work in the UK, but very quickly we began to see a much bigger picture and the opportunity to introduce a more holistic financial health platform to help the broadest possible group of people.

On the one hand this includes those struggling to manage from pay check to pay check, by giving access to tools enabled by very new technologies, principally Open Banking, to help them become better at budgeting. This is essential to help people become less reliant and in need of short-term liquidity.

But budgeting means different things to different people. It’s not always about trying to avert extreme stress and problematic aspects. It can be budgeting to save towards a life goal – buying a home, or getting married, as examples. There’s lots of academic evidence that shows you take on different financial stress as you move up the income scale, so the ability to budget and save towards goals is something which is as relevant for someone on an above average income as a below average income.

By focusing on a financial health platform that offers benefits to a broad user base, employers became a natural fit for the technology, as increasingly some of the biggest employers in the UK are becoming more focussed on their role as responsible employers, which extends to protecting the wellbeing of their staff. As this topic becomes an important boardroom issue, with tangible impacts on the bottom line, we see financial health being a key part of the wellbeing strategy, alongside mental and physical health.


What advice would you give to aspiring entrepreneurs?

Having an initial idea isn’t worth very much if you can’t execute on it and realise it. That is why it is important to surround yourself with good people. I think about it as a Venn diagram. I come from a corporate finance and strategy background; my colleague Paul is from a tech background while my colleague James has a legal mind. The real value comes in the overlap, where the convergence of tech, finance and legal comes together to create something very unique.

Early on in our journey, we brought in Capita Scaling Partner to invest in the business and to overlay our own expertise with sales and marketing clout and everything that comes with that. With access to Capita’s relationships with some of the largest blue-chip organisations and government departments in the UK, we see a real opportunity to turbo-charge our business.

My advice for other entrepreneurs would be to surround yourself with people you trust and who bring complimentary skill sets, and then have a go. You can sit around and think about these things for a long time, but don’t risk losing your moment.

What can we hope to see from Level in the future?

Our savings products will really take off in 2021 and for us this is the real game-changer. The ability to help thousands of people save millions between them is something that will genuinely change lives. That is what inspires and motivates us.

Tools like Level will, we believe, become utility services that every employer offers, just like a gym membership or pension. Obviously, some are mandated but ultimately all employers will start to offer services like ours.

More broadly, I think we are just at the start of a journey in Open Banking. A lot of people within banks don’t believe that as they’ve seen Open Banking crawl its way to this point over 10 years, but the fact that someone now for a very small amount of money can have all the tech tools to offer Open Banking services, means we are just starting to see all those use cases coming to adoption.

Part of our offering is providing these tools to a cohort of users who have never heard of Open Banking. It has largely been used by Millennials. I think what we are seeing now is how it starts to proliferate across the wider UK population, which is a trend that you are going to see a lot more of. For us at Level, we don’t want to be a supermarket of products, nor merely a point solution. It’s about having solutions that are in sync with our core mission, so that will continue.